NEXT WEEK IS THE WEEK
We are still in a range. Only now we happen to be testing the bottom end of that range. As confusion and sub-par price analysis take hold, causing investors to confuse a continued range bound market with a market that is breaking down, it is time to take a look at what lies ahead over the next couple of weeks. I will, of course, have a detailed review in my weekly chart segment to be released on Monday, due to the holiday. In the meantime, let us comb over the Dow with an eye on next week as an important cycle turn date. This comes from my own cycle analysis. It's not based on any Gann, Fibonacci, Elliot Wave or the various other types of cyclical/price studies. It should be noted that price analysis is always subjective in nature. There are no absolutes. What has worked and taken on the utmost importance over the past several months or years could fall flat on its face in the years to come. I believe that what separates the professional from the amateur is knowing when to use what. It is identical to a battle hardened veteran of war as compared to the untested, unaware soldier. That battle tested veteran knows within a split second what information matters and what tools to use as a result of what becomes natural reaction resulting from repetition. The untested amateur meticulously studies the situation, relying on learned book knowledge, as opposed to essential experience that has come from real battle. At this point in time in the market, the cycle that takes place next week means more than the trajectory points that are containing the Dow. click chart to...
IS THIS THE MOST SIGNIFICANT BULLISH TELL OF ALL?
There are millions of ways to gain tells from the market. Some are more illusory than based on fact. Others are no better than a coin flip. And then there are those methods that simply have too dignified a standing to be overlooked under any circumstance. One of the more dignified ways of reading the market from across the table is to look at important averages that the core averages (S&P 500 as an example) like to emulate. I mentioned the SOX a couple weeks back alerting the astute observer to the fact that the market needed more time to consolidate. A good tell. I have another tell to present tonight. This is one I have mentioned countless times in my weekly chart review. This time, there seems to be more urgency involved than with the SOX. Meaning that this do nothing market that we have been napping over the past couple of weeks is close to snapping out of its funk. By the end of next week the direction should be clear. I present to you the CRB: click chart to...
5 CHARTS THAT WILL KEEP YOU IN PEACE AND NOT IN PIECES DURING THE WEEK AHEAD
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AAPL KEEPS WHISPERING SWEET NOTHINGS VIA ITS PRICE PATTERN
As if the perfect consolidation that took place in AAPL before its breakout wasn't enough. Now this: click chart to enlarge
THE LATEST DISEASE TO AFFLICT THE MINDS OF INVESTORS
I can't blame any trader or investor for the behavior I am about to describe. It is, after all, inherent in the market's DNA to condition an investors mind into thinking a certain path is the only path possible before doing the exact opposite. At times, this conditioning takes a period years or even decades, causing the resulting market reaction to be that much more powerful in the direction of least expectation along the path of minimal participation. The behavior that has become prevalent among even smart, experienced traders is that of attempting to search for peaks in a bull market instead of simply allowing the trend to work in their favor. More time and effort is being devoted to looking for reasons the current bull market is about to peak than looking for opportunities to profit from it. Additionally, there is a disease of weak hands looking to throw their cards into the muck at the first sign of adversity. It literally takes no more than a couple percent on the downside to create such a stir among investors that they either begin selling short, liquidating positions or hedging exposure to avoid pain. This may explain the reluctance of the market to to down for more than a few weeks at a time. Sellers are too quick to show up, not allowing the market the firepower on the downside needed to result in anything substantial. It is the job of both the trader and investor to work in the direction of the prevailing trend. You simply study the conditions, allowing your positions to work in your favor until you have adequate reason to believe the trend is changing. Adequate reason. A somewhat vague qualifier. It seems that adequate reason has come to mean any market that goes down for more than a few days. That is all it takes. The market has fooled the vast majority into thinking that every hiccup is a replay of 2008. Or more recently, August of 2011. How many headlines did we see coming into August about a replay of last year? How many times last year did you hear about a replay of 2008 taking place? Investors and traders are feeling froggy. They want to jump at every shadow and light breeze that blows their way. The brain washing at the hands of the market is complete and now you are being bent over for a wax. That is the essence of the what is occurring here. You have been conditioned, no differently than the bell ringing for Pavlov's dog, that when a market dips terrible boogie men are about to jump...
INTRODUCING ZENPENNY PREMIUM
Over the past several months I have been receiving a fair amount of requests and inquiries regarding premium services that I offer. I give a great deal away for free on this website and will continue doing so. The research reports, technical analysis and market commentary will always be available for ALL INVESTORS to access for free. I enjoy bringing to light opportunities that a majority of Wall Street overlooks. I especially enjoy profiting from those opportunities while readers who have also grasped onto both the fundamental and technical facts come along for the ride. There is, however, a great deal more transparency into my process that I can provide. This is why I am introducing Zenpenny Premium. I consider Zenpenny Premium to be both an offensive and defensive tool for investors. I will be emailing out a nightly FACT SHEET that will outline the numerous pieces of data that I analyze on a daily basis. It will go in-depth into my research process, delving into individual companies that I am researching on an ongoing basis. It will also offer deeper and more frequent technical analysis on not just indices and commodities but individual names that I rarely mention on the website. Additionally, my proprietary trend indicator that is the primary means of portfolio allocation and risk control will be updated nightly. There is a whole lot more, as well. For full details and to subscribe click...
HEADS ARE GONNA ROLL: GOLD AND SILVER UP AGAINST A SPIKED WALL OF RESISTANCE
I tweeted earlier today that gold and silver were reasonable short sale candidates at these levels. Here are the charts outlining that view. This has been a rather weak reaction in the precious metals to what is almost a guaranteed QE3 at this point. What that says about the potential for success of this new round of QE is another debate all together. What I am focused on here is the stiff resistance that both gold and silver face here in the form of trajectory points. The upside for gold from this point is especially daunting. click chart to...
PORTFOLIO UPDATE
During the trading day, I tweeted the following: This is a small position, bringing my net long exposure up to 95% with a 5% cash position. The research report for BWC is here. Since I don't utilize leverage, I am close to maxing out on the long-side here, which reflects both the strength of my mechanical trend indicators and my technical readings. The current portfolio, as it stands, in no particular order: BWC, SPNS, SPRT, PXLW, WMIH, ATNY I will more than likely be putting the remaining 5% to work in one of the current positions. Undecided...
RESEARCH REPORT – BWC: AN OPPORTUNITY BY WAY OF INOPPORTUNE DISASTER
*Position taken on August 22nd in the mid-25 range. *Position exited on September 21st at an average price of 26.10 BWC - The Babcock & Wilcox Co. represents my favorite type of opportunity in that the share price has been victimized by inopportune events. As such, I took a small position in this mid-cap company in the mid-25 range during today's trading session. Let me explain what I mean by inopportune events: First, the company is a spin-off from MDR (McDermott). Spin-offs aren't given much room for error as they are greeted in either one of two ways: 1. By current investors in the parent company who receive shares of the spin-off immediately selling the newly issued shares creating months of selling pressure OR 2. By current investors in the parent company taking a wait and see approach. This is typically followed by flinching at the first sign of bad news. Either way, spin-offs are typically ignored by a majority of retail and institutional investors while selling pressure remains consistent for the first part of their existence. A good recent example of this would be AOL, which saw nearly two years of negativity before turning around and becoming one of the best performing tech companies of 2012. BWC was fortunate in the fact that it was spun off from MDR right before QE2 was announced and it responded well. It hardly suffered, beginning a steady regimen of upward movement from a low of 21 in October of 2010 to a high of 36 in March of 2011. The inopportune event came with the arrival of the Japanese tsunami and the destruction of the Fukushima nuclear power plant. Now is a good time to tell you what BWC does: The Babcock & Wilcox Company provides clean energy technology and services for the nuclear, fossil, and renewable power markets worldwide. Nuclear or Nukular depending on the color of your state. BWC is, in fact, one of the largest manufacturers of nuclear power plants in the world. If you will remember following the Fukushima disaster, the nuclear energy sector was forecast to be eliminated over the next decade, as countries could no longer tolerate the risk of having such a potential environmental and humanitarian disaster on their hands. This is typical panic following any disaster in that wide-reaching negative assumptions are made regarding the future of those who are to blame. The elimination of entire industries is always greatly exaggerated. BWC proceeded to fall from a high of roughly 36 when the Japanese tsunami hit to a low of 18 in mid-September of 2011. The inopportune natural disaster paired with market dislocation caused...
5 LONG-TERM CHARTS THAT CREATE CRYSTAL CLARITY FOR THE REMAINDER OF 2012
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